An Analysis of Marketing Procedures Being Used by Leading Fast Food Franchises - Literature review Example

An Analysis of Marketing Procedures Being Used By Leading Fast Food Franchises Table of Contents Introduction 3 Marketing Strategies Practiced by theLeading Fast-Food franchises 4 Market Segmentation 5 Marketing Mix Strategies 6 Fast-Food Marketing To Children 8 Marketing Communication Strategies 9 Summary 10 References 12 Bibliography 18 18 Introduction The global fast-food industry can be considered as one of the fastest growing segments which incorporate various marketing strategies to provide its range of fast-food products in different geographical locations (Schlosser, 2012). According to the present day context, the leading fast-food organisations tend to follow the emerging trend of global fast-food markets through executing various complex marketing strategies. The rapid expansion of the business units into different business locations is also a widely used marketing strategy for the global fast-food marketers. With this concern, the globally reputed fast-food chains have been focusing on increasing their business units through franchisees, in particular into different markets which has certainly enabled these brands to achieve larger market share as well as gain competitive advantages in the growing fast-food industry (Rudd Center, n.d.). Focused on the increasing pace of exploiting different marketing strategies of the global fast-food retailers, the discussion henceforth intends to compare the leading franchises such as Subway, Burger King and Chicken Cottage with struggling fast-food franchises such as Wimpy conducting a literature review. Moreover, the discussion also aims to assess the implemented marketing strategies of the leading fast-food companies in order to improve their performances as well as their global standing. In addition, the discussion further assesses the potential marketing strategies which could be beneficial for the struggling franchises in order to successfully compete with the leading fast-food organisations. Marketing Strategies Practiced by the Leading Fast-Food franchises According to Christian & Gereffi (2010), the budding growth of the global fast-food industry exhibits the trend among organisations to follow a rapid expansion of their business units in different geographical locations. The organisations are highly focused on executing exceptional marketing strategies concerning their diverse range of fast-food products to a large number of global consumers (Christian & Gereffi, 2010). Based in a similar context, Hooley Graham (2008) further observed that the emerging competition among the leading fast-food chain retailers has been a consequence of the extensive marketing activities performed by the global organisations. Moreover, the fast-food retail organisations have also exhibited a trend to incorporate different exceptional marketing strategies by promoting authentic as well as contemporary culinary innovation, cultural tastes, desires as well as demands of the local communities where they operate in the international context (Hooley Graham, 2008). In the similar context, Lichtenberg (2012) has also stated that the global fast-food industry has been playing a crucial role in channelising the effective of internationalisation in various economies, especially, the developing economies by accomplishing a rapid expansion in the various international markets. The organisations have also been implementing extensive expansion initiatives allowing franchises in different nations. The franchise units of the leading fast-food brands have been considerably focused on identifying the tastes and preferences of the local consumers executing effective strategies of delivering products to the customer as per their expectations (Lichtenberg, 2012). On the contrary, brands which are observed to be struggling in the global fast-food chain tend to focus extensively on the authentic culinary culture of the local community. These growing brands are also observed to be significantly influenced by the local or regional as well as state-level laws along with the socio-cultural beliefs among common people or the potential customers by a greater extent than that witnessed among the reputed international fast-food brands (Freeman, 2007). To be precise, the differences in the marketing strategies applied by the global reputed fast-food brands and the developing organisations in the same industry can be identified when assessing the below categories. Market Segmentation According to Kotler & et. al. (2012), marketing segmentation can be identified as an effective and beneficial marketing tool especially for the fast-food organisations which divides a particular market into different subgroups (Kotler & et. al., 2012). For instance, the marketing strategies of Subway and Chicken Cottage, two well-reputed fast-food brands, have significantly been focused on segmenting the targeted markets into different homogeneous and heterogeneous sub-groups. This particular strategy was further observed to facilitate the fast-food retailers in collecting a larger and diverse group of potential customers including different demographic segments. The segmentation strategy of these fast-food organisations are highly focused on dividing customers according to their age groups, income levels and healthy life-style choices among others. Moreover, the franchises of these fast-food companies also encompass religious and national preferences of the customers in terms of offering food products. It is in this context that a greater degree of focus on religious, cultural and national preferences of the relatively smaller group of consumers are rendered by the small fast-food franchises in comparison to the large sized global brands in the international context (Chen & et. al., 2010). With this concern, Larsen (2010) stated that the behavioural, psychographic as well as geographic segmentation also provide ample opportunities for the global marketers to accumulate extensive growth in the competitive fast-food restaurant business industry (Larsen, 2010). Moreover, it has been recognised from the study by Michman & Mazze (1998) that the smaller fast-food organisations tend to be focused on targeting consumers as per their desired tastes and preferences (Michman & Mazze, 1998). On the contrary, larger brands such as Subway and Burger King are observed to be playing the dominant role in their respective industry through targeting people as per their attitude, behavioural aspects along with the values, lifestyles and trends of the customers which further hinder the scope of growth among the other struggling franchises (Michman & Mazze, 1998). Marketing Mix Strategies Differences between the marketing strategies of large fast-food brands and smaller franchises can also be identified with reference to the marketing mix strategies applied by these organisations. For instance, Kotler & Keller (2006), emphasising on the context of continuous advancements made in business activities revealing that large fast-food franchises such as Subway, Berger King as well as Chicken Cottage are highly focusing on their offerings with quality, affordability along with the preferences of their customers from the specific product of service being offered. However, as small fast-food franchises are often observed to face issues regarding social concerns opposing the habit of regular fast-food consumptions, it has becomes quite important for these brands to offer their products with good quality rendering due consideration towards the tastes and preferences of their potential customers (Jargon, 2013; Lichtenberg, 2012). In this regard, it can also be identified from the study of Kotler (2000) that the pricing strategy of any product/service is one of the major decisions for any fast-food organization when penetrating a particular region or a country. According to the present day context, both Subway and Burger King are providing their diverse range of fast-food in a convenient price in more than 70 countries worldwide. Moreover, the organisations also represent an emerging financial growth structure which is apparently lacking amid the struggling fast-food brands. However, through competitive pricing, both the groups of large and small fast-food franchises have been focused on generating new buyers and retaining the existing purchasers with them (Kotler, 2000). When concerning the strategies concerning the placing of the product being offered, Goi (2009) recognised that place is also a significant aspect for organizations to offer their products/services to the final consumers. Correspondingly, according to the present business environment of both Subway and Burger King, it can be observed that the multinational fast-food companies are located in different regions across the world with facilitating products through its range of subsidiaries and franchised units which are comparatively lower in the case of struggling fast-food franchises (Kotler, 2000). In the similar context, according to Kotler (2000), promotion of products and/or services is a major element of the marketing mix that consigns to a practice of influencing the buyers by providing additional benefits within the products/services rendered by the organization. From the perspective of fast-food restaurant industry it has been observed that the organisations such as Subway, Burger King and Chicken Cottage have been executing aggressive promotional strategies to distribute their wide range of food items (Kotler, 2000). Fast-Food Marketing To Children Differences, in relation to the marketing strategies applied by the reputed and struggling fast-food franchises can also be observed with respect to their deliverance of services/products to the children segments. Contextually, there are many fast-food franchises which are observed to be struggling to perform their business operations in an effective manner amid the global market as thus prefer to attract children as their prospective buyers owing to the fact that these groups of consumers tend to be easily persuaded. However, in doing so, the fast- food companies have often been demonstrated to be struggling due to the rapidly growing nutrition concerns among the global societies (Grier & et. al., 2007). Emphasising on this context, Grier & et. al., (2007) stated that parents are more worried with regard to the quality of food consumed by their children for nutrition contains of the fast-food products, owing to which the relatively small fast-food companies are often witnessed to be struggling when offering healthy food products to its consumers (Grier & et. al., 2007). In the similar context, Worcester Polytechnic Institute (2007) stated that poor quality of fast-food as well as beverages is observed to be hampering the health of children. Increasing concern towards such issues have thus influenced the marketing strategies applied by fast-food franchises to offer better nutrition contains (Worcester Polytechnic Institute, 2007; Rudd Center, 2010; Kaushik & et. al., 2011; Samuels & et. al., 2003). Harris & et. al., (2010) further affirmed that the fast-food companies are required to adopt enhanced marketing communication strategies with the intention of creating better awareness among children with respect to the quality contains of the products being delivered. In this regard, it has been observed that leading fast-food companies which include McDonald as well as Burger King tend to collaborate with Children’s Food and Beverage Initiative (CFBAI) with the motive of advertising products in a child-directed manner. However, smaller or relatively newer brands in the industry lack such opportunities owing to the persisting regulative measures and complex formal mechanism of such initiatives (Harris & et. al., 2010). Marketing Communication Strategies According to Akhmurzina & et. al., (2011), fast-food companies adopted marketing communication plan quite effectively and also innovatively with the objective of performing their business operations in a competitive manner. In this regard, it has been observed that promotional strategies of marketing mix are acquired by the reputed fast-food franchises with the motive of advertising as well as promoting the offered fast-food product in the various market segments. Akhmurzina & et. al., (2011) also affirmed that with the assistance of communication strategies, these companies have been able to create better awareness regarding food products among the targeted consumers which further assisted it in developing a persuasive brand image. Additionally, these reputed brands also intend to analyse the behaviour of consumers in order to determine their tastes as well as preferences to obtain competitive advantages in the global market in terms of greater customer satisfaction. With this concern, the struggling companies are observed to be comparatively ineffective in utilising all the promotional tools such as media as well as internet among others which further hampers its image in its targeted market segments (Akhmurzina & et. al., 2011; Asamoah & Chovancova, 2011). According to Lamb & et. al., (2008), a fast-food company develops better public relations with the objective of creating better publicity in the market segments. In this respect, fast-food companies should provide information with relation to the nutrition base of the food products as well as services offered. Emphasising on a similar context, Lamb & et. al. (2008) stated that effective communication strategies are quite likely to enable fast-food companies in developing better relations with its customers and therefore gain the benefits of long-run sustainable growth opportunities. In this respect, there are many fast-food companies which are observed to be struggling fundamentally owing to the reason that these companies were unable to create better relationship with its targeted customers due to inefficient communications strategies. In this context, Harrison & et. al. (2010) also stated that there many fast-food companies which faced intense competitions as well as failed to perform effectively due to the fact that these companies were inefficient in reaching target customers successfully which also noted the significance of effective communication strategies when aiming at sustainable growth (Harrison & et. al., 2010). Summary The demand for fast-food companies has substantially increased in the market segments worldwide where not only children but young people also are observed to decipher their incessantly increasing preferences for fast-food products. It is in this context that the increased demand for fast-food products has intensified the market competition among fast-food companies. In this perspective, fast-food companies are required to adopt enhanced marketing strategies with the objective of improving their performances substantially as well as to acquire a better competitive market position and thus obtain the benefits of sustainable growth. These marketing strategies shall also enable the struggling fast-food franchises in building better brand image within the targeted market segments and therefore obtain competitive benefits over its other existing rivals. References Akhmurzina & et. al., 2011. An Analysis of McDonald’s Fast Food Chains in France and a Marketing Communications Plan to Help the Brand Improve its Equity. Situational Analysis. [Online] Available at: http://www.delranschools.org/9392011705335640/lib/9392011705335640/imcgroup11-111122152148-phpapp02.pdf [Accessed March 04, 2013]. Asamoah, E. S. & Chovancova, M., 2011. The Theory of Consumer Behaviour in Fast Food Marketing: Strategies for Competitive Advantage. Recent Researches in Economics. [Online] Available at: http://www.wseas.us/e-library/conferences/2011/Montreux/ICICIC/ICICIC-08.pdf [Accessed March 04, 2013]. Chen, M. L. & et. al., 2010. Expansion Trend of Fast Food Franchises in Metro Manila. The Journal of Global Business Management. Christian, M. & Gereffi, G., 2010. The Marketing and Distribution of Fast Food. Global Health. [Online] Available at: http://www.cggc.duke.edu/pdfs/GlobalHealth/2010-09-03_Christian_Gereffi_The_marketing_distribution_of_fast_food_Ch30.pdf [Accessed March 03, 2013]. Cornelissen, J., 2011. Corporate Communication: A Guide to Theory and Practice. SAGE. Freeman, A., 2007. Fast Food: Oppression Through Poor Nutrition. California Law Review, pp. 2221-2259. Goi, C. L., 2009. A Review of Marketing Mix: 4Ps or More? International Journal of Marketing Studies, Vol. 1, No. 1, pp. 2-15. Grier, S. A. & et. al., 2007. Fast-Food Marketing and Children’s Fast-Food Consumption: Exploring Parents’ Influences in an Ethnically Diverse Sample. American Marketing Association, Vol. 26, No. 2, pp. 221-235. Grunig, J. E. & et. al., 2007. The Future of Excellence in Public Relations and Communication Management: Challenges for the Next Generation. Routledge. Harris, J. L. & et. al., 2010. Evaluating Fast Food Nutrition and Marketing to Youth. Media. [Online] Available at: http://www.fastfoodmarketing.org/media/FastFoodFACTS_Report.pdf [Accessed March 04, 2013]. Harrison & et. al., 2010. Targeting Children with Integrated Marketing Communications. Connect. [Online] Available at: http://www.sahealth.sa.gov.au/wps/wcm/connect/0d3a6000490e3444b22ef67675638bd8/FU+Target+child+integrated+marketing-PHCS-HPB-201004.pdf?MOD=AJPERES&CACHEID=0d3a6000490e3444b22ef67675638bd8 [Accessed March 04, 2013]. Hooley Graham, H., 2008. Marketing Strategy and Competitive Positioning, 4/E. Pearson Education India. Jargon, J., 2013. Fast Food Aspires to Fast Casual. The Wall Street Journal. [Online] Available at: http://online.wsj.com/article/SB10000872396390444657804578048651773669168.html [Accessed March 04, 2013]. Kaushik, J. S. & et. al., 2011. Fast Food Consumption in Children. Indian Pediatrics, Vol. 48, pp. 97-101. Kotler, P. & et. al., 2012. Marketing Management, 2nd Edition. Pearson. Kotler, P. and Keller, K. L., 2006. Marketing management, 12th Edition. Pearson Prentice Hall. Kotler, P., 2000. Marketing Management Millennium Edition. Prentice-Hall Inc. Lamb, C. W. & et. al., 2008. Marketing. Cengage Learning. Larsen, N., 2010. Market Segmentation: A Framework of Determining Right Customers. Aarhus School of Business. [Online] Available at: http://pure.au.dk/portal-asb-student/files/11462/BA.pdf [Accessed March 03, 2013]. Lichtenberg, A. L., 2012. A Historical Review of Five of the Top Fast Food Restaurant Chains to Determine the Secrets of their Success. Growth. [Online] Available at: http://scholarship.claremont.edu/cgi/viewcontent.cgi?article=1367&context=cmc_theses [Accessed March 03, 2013]. Michman, R. D. & Mazze, E. M., 1998. The Food Industry War: Marketing Triumphs and Blunders. Greenwood Publishing Group. Rudd Center, No Date. Introduction. Media. [Online] Available at: http://www.fastfoodmarketing.org/media/FastFoodFACTS_Report_Introduction.pdf [Accessed March 03, 2013]. Rudd Center, 2010. Fast Food Targeted Marketing. Media. [Online] Available at: http://www.fastfoodmarketing.org/media/FastFoodFACTS_TargetedMarketing.pdf [Accessed March 04, 2013]. Samuels, S. E. & et. al., 2003. Food And Beverage Industry Marketing Practices Aimed At Children Developing Strategies For Preventing Obesity And Diabetes. Articles. [Online] Available at: http://epsl.asu.edu/ceru/Articles/CERU-0311-208-OWI.pdf [Accessed March 04, 2013]. Schlosser, E., 2012. Fast Food Nation: The Dark Side of the All-American Meal. Houghton Mifflin Harcourt. Worcester Polytechnic Institute, 2007. Fast Food Marketing to Children. Public Health Communication, Vol. 1, pp. 1-4. Bibliography Burns, P., 2011. Entrepreneurship and Small Business. Palgrave Macmillan. Ferrel, O. C. & Hartline, 2010. M. D., Marketing Strategy. Cengage Learning. Stokes, D. R. & Wilson, N., 2010. Small Business Management & Entrepreneurship 6e. Cengage Learning EMEA. Read More